Write the incentive compatibility constraint

Reference no: EM13190156

An L treatment costs the physician 100 in cash, an H treatment costs the physician 200 in cash. A physician's utility from consumption x is log(x). an L treatment leads to a good outcome with probability 0.4. An H treatment leads to a good outcome with probability 0.6. The physician is paid with WG for a good outcome, and WB for a bad outcome. Write the incentive compatibility constraint.

Reference no: EM13190156

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